Spanish bad loans rose for the fourth month in a row, surging to a new all-time high at 11.97% of total loans outstanding. With the total loans outstanding falling (as credit demand collapses in Spain's supposed 'recovery') and delinquent loans rising, the picture is set to to get worse - even as the Bank of Spain's rescue plan for real estate market is under way. Crucially though, as the chart below suggests, the spread of Spanish sovereign debt - which by now is so symbiotically-linked with the domestic financial system as to be almost inseparable - has collapsed on the back of OMT promises. Our question is - at what point does the marginal buyer of Spanish sovereign debt (i.e. Spanish banks) run out of 'cover' to soak up Spain's supply and force Draghi's hand - exposing the fallacy that OMT is?